Cyprus Business Now: Middle East fallout, banks, inflation, CITEA, PwC, Logicom
The Central Bank of Cyprus (CBC) has lowered its growth forecasts for the Cypriot economy for 2026 and 2027, pointing to the impact of the war in the Middle East and warning that risks remain tilted to the downside. In its June 2026 economic bulletin, the CBC said it now expects GDP to grow by 2. 5 per…
The Central Bank of Cyprus (CBC) has lowered its growth forecasts for the Cypriot economy for 2026 and 2027, pointing to the impact of the war in the Middle East and warning that risks remain tilted to the downside. In its June 2026 economic bulletin, the CBC said it now expects GDP to grow by2. 5 per cent in 2026, down from the2. 7 per centforecast in March. Growth in2027was also revised slightly lower, to2. 9 per centfrom3 per cent, while the economy is expected to accelerate to3. 1 per cent in 2028. The central bank said the relatively limited impact on this year’s forecast was because some conservative estimates had already been incorporated in the March projection round. However, it warned that “the main downside risks to GDP” are linked to the possible non-finalisation or non-implementation of the agreement announced between the United States and Iran. Eurobank this week presented its new Banking Forward strategy in Athens, outlining a €1 billion technology investment programme alongside a broad digital banking transformation centred on artificial intelligence (AI), mobile banking and redesigned customer journeys for both retail and business clients. The event took place on June 29 at theEurobank Campus Conference Centre in Nea Ioniain the presence of chairman George P. Zanias and deputy chief executives Constantinos Vassiliou, Iakovos Giannaklis and Stavros Ioannou. The programme showcased how the bank is using technology, data, AI and a modern digital architecture to create a more personalised, simpler and more efficient banking experience. At the centre of the strategy isthe largest technology investment programme in Eurobank’s history, with approximately€1 billionearmarked for the 2025 to 2028 period to strengthen infrastructure, cloud technologies, data capabilities, AI and new digital services. The 5th Digital Cyprus Conference 2026 was successfully held this week in Nicosia, bringing together senior business executives, government representatives, technology professionals and internationally renowned speakers. Organised by the Cyprus Information Technology Enterprises Association (CITEA) and IMH, this year’s conference focused on the transformation of the modern business environment throughartificial intelligenceanddigital technologies, which are creating new growth opportunities for businesses and organisations. The conference was addressed by Deputy Minister of Research, Innovation and Digital PolicyNicodemos Damianou, who emphasised the importance ofdigital transformationand the adoption ofartificial intelligencein enhancing the competitiveness of the Cypriot economy. At the same time, leading speakers from Cyprus and abroad took part in the conference, presenting high-level insights and engaging in discussions on the latest developments in digital transformation. Particular emphasis was placed on strategies that can help strengthenbusiness competitivenessin the new digital era. PwC Cyprus entered a new leadership chapter on Wednesday, with Andreas Yiasemides assuming the role of CEO for a four-year term, succeeding Philippos Soseilos after more than four years at the helm. Yiasemides takes over as ofJuly 1, 2026, with his term running untilJune 30, 2030, at a time when the professional services sector is being reshaped bydigital transformation, artificial intelligence, tighter regulation and shifting client needs. The handover was set in motion last December, whenPwC Cyprus elected Yiasemides as its next CEO, confirming that he would succeed Soseilos at the start of July. The change also marks the end of a long chapter for Soseilos, who joined PwC in1989and became a partner inJuly 2000, before being appointed CEO of PwC Cyprus inJanuary 2022. During his tenure, Soseilos led the organisation through a period marked by repeated external pressures, including the aftermath of the pandemic, the impact of the war in Ukraine, the closure of the Russian market, inflationary pressures, geopolitical uncertainty, increasing regulation and the rapid rise ofartificial intelligence. Cyprus recorded an estimated annual inflation rate of 4 per cent in June 2026, up from 3. 5 per cent in May, according to flash figures released on Tuesday by Eurostat, while inflation across the euro area eased. The latest estimates fromEurostat, the statistical office of the European Union, also showed that consumer prices in Cyprus increased by0. 8 per cent on a month-on-month basisin June, as measured by the Harmonised Index of Consumer Prices (HICP). The increase in Cyprus contrasted with the broader euro area, whereannual inflation is estimated to have fallen to 2. 8 per cent in June, down from3. 2 per cent in May. The figures indicate that Cyprus’ annual inflation rate remainedwell above the euro area average, with price growth accelerating domestically even as inflationary pressures eased across the single currency bloc. Agros Development Company Proodos Public Ltd announced this week that it expects a significant divergence in its financial performance for the first half of the year compared to the same period in 2025. Based on unaudited financial data for the period spanning January 1, 2026, to June 30, 2026, the company anticipates areduction in operating profitbefore interest, taxes, depreciation and amortisation. The company identified the primary factor behind this downturn as anincrease in operating and administrative expenseslinked to theRodon Hotel, which serves as the principal asset of the firm. Logicom Public Ltd announced this week that it expects a marginal reduction in turnover for the first half of 2026 compared to the same period in 2025. The company attributed this decline primarily to the ongoingmilitary conflictin theGulf region. This geopolitical tension has exerted anegative influenceon the broader business environment in which the company operates, Logicom explained. Despite the impact on turnover, theoperating profitfrom regular and existing business activities is expected to remain at roughly the same levels as the previous year. Furthermore,profitability, when excluding the results of subsidiary firmDemetra Holdings Plc, is also forecast to remain stable. Food prices in Cyprus are once again rising faster than wider inflation, adding fresh pressure to household purchasing power, according to a report by Trojan Economics, a Cyprus-based firm specialising in competition economics. The report, written by the firm’s director Panayiotis Agisilaou and partner Stavros Efthymiou, said that public debate around the cost of living often focuses on inflation as measured by the Consumer Price Index (CPI), which tracks the average change in prices across a broad basket of goods and services. However, it noted that the daily reality for households is shaped more directly by the prices of basic consumer goods, particularly food. For that reason, Trojan Economics said, looking at the individual components of inflation can give a clearer picture of the pressures facing consumers. The Cyprus Statistical Service (Cystat) reported this week that the Index of Industrial Output Prices for May 2026 reached 125. 7 units, marking a 3. 0 per cent increase compared to April 2026. When measured against the same month of the previous year, the index recorded an annual increase of 2. 5 per cent. For the period covering January to May 2026, the index showed an overall increase of 0. 6 per cent compared to the corresponding period of 2025. Analysing the monthly performance from April to May 2026, the index remained stable in the mining and quarrying sector. However, significant increases were observed in other areas, with the electricity supply sector rising by 13. 4 per cent. The value of loans managed outside Cyprus’ banking system increased by €256 million during the first quarter of 2026, according to figures released this week by the Central Bank of Cyprus (CBC), with growth driven primarily by higher household and business loan balances. The CBC said thecontractual balance of all loans managed by Credit Acquiring Companies and Credit Servicing Companiesreached€19. 61 billionas ofMarch 31, 2026, representing an increase of1. 3 per centfrom€19. 35 billionat the end of 2025. The increase was mainly attributed to a€131 million rise in household loansand a€118 million increase in loans to non-financial corporations. According to the central bank,household loansunder management totalled€9. 67 billion, of which€662 million were performingand€9. 01 billion were non-performing. The Cyprus Stock Exchange (CSE) on Wednesday announced that it recently presented its annual academic excellence award to the top-performing economics student at the University of Cyprus, continuing a long-standing initiative promoting educational achievement and recognising outstanding academic performance. The award was presented as part of the organisation’s broader contribution to society and its corporate social responsibility programme, the exchange said. The distinction, officially named the“Cyprus Stock Exchange Annual Award in memory of former CSE Council chairman Akis Cleanthous”, was presented during a special awards ceremony honouring University of Cyprus students who excelled during the2025-2026 academic year. Demetra Holdings Plc held its twenty-sixth annual general meeting in Nicosia on June 30, where the company announced a significant return of capital to shareholders alongside a cautionary outlook for the coming months. Theboard of directorssecured approval for afinal dividend of €0. 10 per share, marking the first such distribution in two decades. Thisdividend, totalling€20 million, will be paid within 90 days of the approval, with the company confirming arecord date of July 9, 2026. Trading of the company’s shares will occurwithout the dividend entitlementstarting on July 8, 2026. During the proceedings, first executive directorKleanthes Chandriotespresented the company’sfinancial performance for the year ending December 31, 2025. The European Commission’s pledge to prevent shipping companies from being charged twice for the same emissions is a welcome step, but the industry now needs clear guidance on how this will work in practice, according to integrated emissions management service EmissionLink. Although the principle of avoiding double charging is clear, the practical reality is far more complicated. Shipping is already operating within an increasingly crowded regulatory landscape, withEU ETSandFuelEU Maritimenow in force, while theInternational Maritime Organisation (IMO)moves towards its own global Net-Zero Framework. Each system, however, has a different scope, timeline, calculation method and commercial logic. As a result, EmissionLink warned that, without detailed guidance, avoiding duplicate carbon costs will not be straightforward. The board of directors of ASBISc Enterprises Plc has announced the appointment of Jaan Kristian Teär as a non-executive director, with the decision taking effect from July 1, 2026. This leadership development follows a busy period for the company, which in late June 2026 also reported its latestfinancial resultsregarding monthly consolidated revenues. The compay said thatJaan Kristian Teärbrings over 30 years of experience in leading publicly listed companies, having earned recognition for drivingstrategic repositioningandshareholder value creationacross the telecommunications, consumer electronics, and digital infrastructure sectors. The new director most recently served as the chief executive officer ofBang & Olufsenfrom 2019 to 2026, where he led the transformation of the firm into a globally positioned luxury technology brand. A total of 800 homes out of 1,200 approved properties have been incorporated into the mortgage to rent scheme, state-owned asset management company Kedipes said on Wednesday, as it continues processing applications. The company clarified that the acceptance and assessment of applications for the scheme is ongoing. It also confirmed that a new€50 million cash payment for the second quarter of 2026was made as part of the repayment of state aid received by the former co operative banking system. Kedipes said that since beginning operations in 2018, total repayments of state support have reached€1. 87 billion. Of this amount,€1. 76 billionrelates to cash repayments of state aid. Cyprus’ turnover value index of retail trade saw an year-on-year increase of 9. 8 per cent in May, according to a report from the state statistical service (Cystat). For the same month, theturnover volume index of retail tradealso experienced a positive trajectory, rising by7. 5 per centwhen compared to May 2025. Regarding the value index, thelargest annual increasewas recorded inautomotive fuel at 20. 9 per cent, followed by the category ofother household equipment(including building materials, carpets, furniture, electrical appliances, and lighting) at12 per cent. Additionally,educational and recreational goods, such as books, stationery, sporting equipment, and toys, recorded avalue increase of 10. 1 per cent. The Cyprus Securities and Exchange Commission (CySEC) announced on Wednesday that it has granted an exemption to Logicom Services Limited regarding the mandatory requirement to launch a public takeover bid for Demetra Holdings Plc. This regulatory decision follows a formal request submitted by Logicom Services Limited to the commission. The exemption was granted in accordance with the provisions of article 15(1)(ib) of the Takeover Bids Law of 2007, as amended. The obligation for a public bid would have otherwise been triggered by anincrease in the total percentage of voting rightsheld by Logicom Services Limited in Demetra Holdings Plc.